Rihanna Helped Puma Reverse

According to the world clothing and shoe net, it has just started two months in 2017, and the two giants in the sports market: Germany Puma SE (

And the United States

Inc.'s situation has quietly reversed.

Partly thanks to the endorsement of celebrities like Rihanna and other celebrities, Puma's strong return, profit growth, and stock prices soared, and Under Armour Inc.'s performance was quite different, sales growth slowed, and stock prices fell.

The way Puma collaborate with celebrities did not work even years ago.

Achilles' heel.

In those days, Puma was the first to test the water fashion but unfortunately caught up with the financial crisis. At that time, consumers were more concerned about practical sports equipment and more turned to Under Armour, the main professional performance.

Nowadays, more and more consumers wear fitness clothes outside the gym, such as coffee shops, clubs, shopping malls or travel. They need more sportswear clothes.

This means that Puma is recovering land lost.

Although its profit margin is far below the level of more than 20%, its share price has risen by more than 30% in the past 6 months, during which the market value of Under Armour has shrunk by half.

Changes in Puma and Under Armour profit margins from 2013 to 2016

Changes in share prices between Puma and Under Armour between 2015 and present

"We often call these companies sports leisure brands," said Chen Grazutis Grazutis, an analyst at Bloomberg Intelligence. But the fact is that they are more concerned about fashion than ever before.

Most people who buy sports shoes do not use them for sports.

However, the Puma stock price, which has been in a depressed state for a long time (currently 293 euros), still does not return to the level of 330 euro per share when it was acquired by Kering SA (France Open Cloud group) in 2007. Some analysts said that Kering might still choose to sell its Puma shares.

During the Puma restructuring period, investors in Under Armour gained substantial returns from 2011 to 2015, and their market value increased by three times.

But since then, share prices have been falling, especially after the fourth quarter earnings announcement in 1 month. Sales of Under Armour have been disappointing and share prices have dropped sharply. Chief executive Kevin Plank has pointed out that Under Armour is not paying enough attention to fashion.

A few days later, Puma announced that its sales and profits in 2016 exceeded analysts' forecasts and expected that the growth of operating profit in 2017 would not be lower than in 2016.

Under Armour's pre tax profit (EBIT) has increased by more than 1o times in previous years, but analysts now predict that this year's figure will fall by 17%, the first decline since 2008.

Puma's EBIT (excluding special items) grew by 1/3 in 2016, the first increase since 2010, and analysts expect growth of 47% this year.

Puma spokesmen include Usinter Bolt (Boulter) and other sports stars, but also expand their influence through social media.

In 2014, Puma signed the singer Rihanna as the brand ambassador.

Rihanna has millions of fans in Twitter, Facebook and Instagram. She helped Puma attract more young customers and achieved great success.

This allowed Puma to include model and actor Cara Delevingne and reality show star Kylie Jenner last year in its spokesperson list.

Analysts say there is room for development in sports and leisure.

This is good news for Puma, but Under Armour will face greater challenges.

Chen Grazutis said: "we are now in a very casual, fashion centric era. Basketball shoes and running shoes are not as strong as before.

For companies like Under Armour, the current situation is particularly difficult, though they can be adjusted, but obviously this is not their strong point. "

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